8 Cheap Places to Retire Abroad

Whether your inspiration is Hemingway in Paris, Kerouac in Tangiers, or some other generation of American expats, there's something oh-so-romantic about retiring abroad. There's also a practical consideration: A buck goes a lot farther in Costa Rica. At a time when nearly half of Americans approaching retirement age don't have enough dollars stashed away, the best retirement planning decision you can make might be to change planes in Florida instead of settling there. More than 500,000 retirees live overseas, and the number is increasing.

To make your expat dreams a reality, however, will take a whole lot of research. The easy path is to flock to Boca with all those other snowbirds; it’s quite another thing to head off to a place where English isn’t spoken everywhere, the water may or may not be potable and SportsCenter isn’t even one of the premium channels. If you complain about Obamacare, just wait till you need to get cataract surgery in a hospital that doesn’t take Visa.

The good news is that there are scads of Web sites, media outlets, authors, and bloggers who can help guide you to the best, most affordable places. CBS MoneyWatch.com reviewed recommendations from the most prominent list makers for their best advice and favorite destinations. We’ve also put together a list of sources for further research, and explained how to use them.

Advice from Expats

Retiring to a foreign country has complications you won’t encounter when moving from Philadelphia to Phoenix. There may be bureaucratic tangles, language barriers, a lack of first-rate medical care, peculiar rules about taxes and property ownership, plus a sense of isolation. So MoneyWatch asked three Americans who retired south of the border for their best tips to make an overseas move as painless as possible:

Barry Golson, Sayulita, Mexico: “Visit a place two or three times before moving there. Try to stay a week or two to get the lay of the land and to talk to expats.”

Rich Lipner, Boquete, Panama: “Figure out in advance what you’d do if you lived in the country. Once you arrive, think of yourself as a guest in the country. They don’t have to adapt to you. You have to adapt to them.”

Barbara Kirkwood, San Pancho, Mexico: “Are you willing to learn a second language? I’ve been here nine years and I struggle with that. It’s also a good idea to rent a place for a while rather than buy immediately to be sure you’re comfortable there.”

How the Lists Compare

Before looking for your own Shangri-La, know this: Most “best places to retire abroad” lists are even more anecdotal than the U.S. lists. They generally reflect the views of the writer or a website’s visitors, whose idea of a great place to live might not be the same as yours. So tread carefully, especially before packing up and moving.

AARP

How it rates places: The “Best Places to Retire Abroad” list in the magazine’s September/October 2010 issue and on AARP.org was created by journalist Barry Golson. It echoes his Retirement Without Borders book’s picks, combining his statistical research with streetwise reporting, zeroing in on particular, affordable locales within selected countries.

Forbes

How it rates places: Forbes can’t quite make up its mind about choosing a place to retire abroad. Last October, its Web site published “The 10 Best Retirement Havens,” vaguely explaining that it used criteria from safety to decent medical care, though not affordability. Seven months later, Forbes.comwas back with “The Best Foreign Retirement Havens” — a slideshow of a dozen countries chosen “after scrutinizing a lot of information” (including living costs) but “no precise scientific method or numerical ranking.” Since the Foreign Retirement Havens list gave a nod to costs, that’s the list MoneyWatch recommends for value hunters.

Global Post

How it rates places: An American site featuring international news, Global Post’s “Low-Cost Retirement Destinations Abroad” list primarily stat-driven. The site came up with its 10 picks looking at the cost of living, high United Nations Human Development Index ratings (measuring adult literacy, life expectancy and income levels) and access to good medical care, as well as beautiful, relaxing settings and a range of activities for retirees.

International Living

How it rates places: This site has two lists combining country statistics with personal experiences from its 200 contributors. “The World’s Top Retirement Havens” (also called the Global Retirement Index) is the more rigorous one, using a point system to choose the “30 top countries to retire in” based on eight categories from real estate (extra points for low prices and ease of purchasing property) to government benefits for retirees. Its squishier Quality of Life Index, reflecting an admitted “Western bias,” is a ranking of 194 countries that’s not about best value, but “where the living is, simply put, great.” So “Retirement Havens” is the better list if you’re looking for an affordable place to retire.

Kiplinger’s

How it rates places: The magazine’s choices come from its “Retire South of the Border” story — which, by definition, narrows the selection drastically. The countries were selected through reporting, not a statistical sifting.

Retirement Without Borders

How it rates places: In Barry Golson’s excellent how-to book for would-be expats, the author ranks countries he thinks Americans might consider for retirement on an affordability scale, from “Very Affordable” to “Very Expensive.”

Top 10 picks for affordability: Argentina, Nicaragua, Ecuador, Philippines, Honduras, Thailand (inland, big city and some resort towns), Belize, Panama (inland and some resort towns), Costa Rica (inland and some resort towns) and Mexico (inland, some resort towns and villages)

U.S. News

How it rates places: Normally a powerhouse in the ratings game, U.S. News is surprisingly flabby here. The magazine merely asked Kathleen Peddicord (author of How to Retire Overseas) to name her favorite “7 Affordable Places to Retire Abroad.”